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Taxes are inconvenient, unavoidable, time-consuming, and can be frustrating. And while most of us would rather be doing just about anything else, Money Talks News founder Stacy Johnson has a few ideas to help you get through filing faster this year by planning ahead.
If your children don’t already have a Social Security number, get one now. Fill out the Application for a Social Security Card from the U.S. Social Security Administration website and locate your child’s birth certificate. You’ll need to bring the application, birth certificate, and your child to your local office. Anyone 12 or older applying for an original SSN has to be interviewed in person.
If you didn’t work last year but collected unemployment, you’ll need a 1099-G. If you received interest on savings accounts, made short or long-term capital gains, collected Social Security, or received a pension, you’ll need proof of that as well, which you’ll get from other 1099 forms.
See a pattern here? Proof of income you earned comes either on a W-2 or 1099.
Pull out last year’s tax return and see what income you reported. If you had income from the same sources this year, make sure you have all forms in hand. If you don’t have all documentation by Jan. 31, call employers, clients, or bank reps and ask.
If you can’t find last year’s returns, you can order a copy online through the IRS website at Order a Transcript.
In Tax Hacks 2012: 8 Easy-To-Miss Deductions we found some commonly overlooked deductions that can save you big, such as child care expenses. If you paid for someone to watch your child, disabled spouse, or dependent family member while you were working, you might be able to deduct part of the cost. And then there are medical expenses: If yours exceeded 7.5 percent of your adjusted gross income, it will lower your taxable income.
Work from home? There are home office deductions, but they come with sticky rules. Check out Tax Hacks 2012: Home Office Deductions for more details.
Other things are deductible too, like mortgage interest, business travel, and work-related education expenses. Check out the Internal Revenue Service’s Itemized Deductions site for a list. Take your time and go over it carefully. Remember, every $100 of deductible expenses can mean up to $35 in refunds.
Another way to speed up your refund (in about 10 days, according to the IRS), is to file electronically.
And once you have that refund in hand, do something great with it. Check out this story we did last year, Tax Hacks 2012: 7 Smart Uses for Your Tax Refund for some inspiration, like building an emergency fund, investing, or starting a business.
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